Oil prices settle near 4-week high as Middle East crisis escalates

Crude oil prices experienced a significant rise on Wednesday, settling at a four-week high due to escalating tensions in the Middle East. Brent crude futures reached $91.62 a barrel, while U.S. West Texas Intermediate crude futures increased by 89 cents, or 1.1%, to settle at $85.83 a barrel. These prices marked their highest levels since July 24.

The tension is primarily attributed to the United Arab Emirates suspending all financial and economic transactions with Iran following missile attacks. However, Iran claimed the Strait of Hormuz, which carries about one-fifth of global oil and liquefied natural gas supplies, remained closed. This situation led to concerns among investors about potential disruptions in oil shipments and a higher risk premium.

Meanwhile, oil shipments from Russia's western ports have decreased to approximately 2.3 million barrels per day, falling short of the initial loading plan by 15%. The U.S. Energy Information Administration reported that crude inventories in the country rose by 4.4 million barrels to 428.8 million barrels, alleviating some concerns about tight supplies.

Refiners have also been actively purchasing crude barrels due to high margins and the ongoing attacks on Russia's refining sector, impacting global fuel supplies.